2024 (1) TMI 671 - AT - Central Excise

Tribunal Upholds Exemption for Iron Ore Fines from 6% Deposit Rule Under Cenvat Credit, Dismissing Revenue's Appeal.

Principal Commissioner, CGST & Central Excise, Customs- Raipur Versus Bajrang Power & Ispat Ltd.

The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s order that set aside the demand for the respondent to deposit an ... CENVAT Credit - iron fines emerging during the process of manufacture of sponge iron ore - case of the Revenue is that the iron ore fines are not excisable and no excise duty is paid on them - non-maintenance of separate records for manufacture of sponge iron and iron ore fines in terms of Rule 6(1) of the Cenvat Credit Rules, 2004 - HELD THAT:- The case of the Respondent is that it does not manufacture the iron ore fines at all and they emerge as a by-product in the manufacture of its main product, namely, sponge iron and, accordingly, Rule 6 of the Cenvat Credit Rules would not apply - this issue is no longer res integra and in the respondent’s own case in M/S GHANKUN STEELS PRIVATE LIMITED. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, RAIPUR. [2019 (5) TMI 1998 - CESTAT NEW DELHI] it has been held by this Tribunal that the Respondent need not deposit the amount equal to 6% under Rule 6(3) of the CCR. The amendment made by way of explanation to Rule 6 makes no difference because the question is not if the goods are non-excisable or excisable but exempted but whether the iron ore fines are manufactured or not and this Tribunal has consistently held that the iron ore fines are not manufactured but only emerge during the process of manufacture of sponge iron - there are no force in the appeal by the Revenue. The appeal is, accordingly, dismissed and the impugned order is upheld. Issues Involved:The appeal challenges the order setting aside the demand for depositing an amount equal to 6% of the value of iron ore fines under Rule 6(3) of the Cenvat Credit Rules, 2004.Summary:The case involved a dispute regarding the liability of the respondent to deposit an amount equal to 6% of the value of iron ore fines under Rule 6(3) of the Cenvat Credit Rules. The Revenue contended that since no excise duty was paid on the iron ore fines, the respondent was required to maintain separate records and pay the said amount. However, the respondent argued that the iron ore fines were not manufactured but emerged as a by-product in the process of manufacturing sponge iron, hence exempt from the rule. The Tribunal, relying on previous decisions, held that the respondent was not liable to deposit the amount under Rule 6(3) as the iron ore fines were not considered as manufactured goods. The appeal by the Revenue was dismissed, upholding the impugned order of the Commissioner (Appeals).Key Points:- The Revenue challenged the order setting aside the demand for depositing an amount equal to 6% of the value of iron ore fines under Rule 6(3) of the Cenvat Credit Rules.- The dispute revolved around whether the respondent was required to maintain separate records and pay the amount due to the non-payment of excise duty on iron ore fines.- The Revenue argued that Rule 6 of the CCR applied as no excise duty was paid on the iron ore fines, necessitating the deposit under Rule 6(3).- The respondent contended that the iron ore fines were not manufactured goods but emerged as a by-product during the manufacturing process of sponge iron, hence exempt from the rule.- Relying on previous decisions, the Tribunal held that the iron ore fines were not considered as manufactured goods, thus the respondent was not liable to deposit the amount under Rule 6(3).- The Tribunal dismissed the appeal by the Revenue, upholding the impugned order of the Commissioner (Appeals) and disposing of the miscellaneous application.